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/raid1/www/Hosts/bankrupt/TCRLA_Public/021101.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Friday, November 1, 2002, Vol. 3, Issue 217 Headlines A R G E N T I N A AEROLINEAS ARGENTINAS: Bankruptcy Emergence Expected Soon PECOM ENERGIA: Sells Venezuelan Gas Field Shares PEREZ COMPANC: Announces JV Agreement With Teikoku Oil * S&P Rates Argentine BODEN Bonds CC B R A Z I L BRASIL TELECOM: Dollar-Denominated Debt Swells In 3Q02 BSE: Fitch Cuts Ratings FIAT: May Sell Bank in Brazil to Raise Cash MRS LOGISTICA: Fitch Drops Local Currency To BB- on Weakness NET SERVICOS: Board Notes Ongoing Debt Renegotiation Decisions NET SERVICOS: Shareholders Approve Debt Restructuring Plan * Incoming Government Leadership Mulls State Debt Renegotiation C H I L E TELEFONICA CTC: Losses Continue In 3Q02 After Various Charges M E X I C O AHMSA: Disallows Creditors From Attending Upcoming Assembly GRUPO TMM: Announces Operating Partnership With Hub Group P E R U SIDERPERU: Shrinks Net Loss In 3Q02 Despite Slower Sales T R I N I D A D & T O B A G O BWIA: Faces Imminent Closure Pending Concession Decision BWIA: Pilot Association Questions Training Activities BWIA: Employees Stage Strike V E N E Z U E L A SIDOR: Contemplates Legal Action To End Strike SURAL: Negotiating Debt With Venalum to Reopen Supply Lines - - - - - - - - - - ================= A R G E N T I N A ================= AEROLINEAS ARGENTINAS: Bankruptcy Emergence Expected Soon ---------------------------------------------------------- Argentine national carrier Aerolineas Argentinas, which has been struggling ever since its 1990 privatization, is close to concluding its current bankruptcy process. The Company, in an emailed statement to Dow Jones Newswires, said that last Friday they sent a list of names to a commercial judge made up of creditors who had agreed to a 60% reduction on what they owed in exchange for receiving the balance money within two years. A total of 324 creditors, which represent 76% of the Company's debt, have accepted the plan. Under Argentine law, Aerolineas needs to have the support of creditors controlling at least two thirds of the total debt. Aerolineas, owned by private Spanish consortium Air Comet, had also gained the support of 60% of the total number of creditors, well above the 51% minimum the law requires. The Company proposed to pay back the remainder of the pending obligations in three intallments - 10% after three months, 35% in 12 months and 55% at the end of the two years. The debt will be paid entirely in pesos even though the ARS2.5-billion ($1=ARS3.585) debt the Company had when it filed bankruptcy was in both pesos and dollars. CONTACT: AEROLINEAS ARGENTINAS Torre Bouchard 547, 1106 Buenos Aires, ARGENTINA Phone: (54-11) 4310-3000 Fax: (54-11) 4310-3585 E-mail: volar@aerolineas.com.ar Home Page: www.aerolineas.com.ar Contact: Patricio Zabalia Lagos, President AIR COMET Baha de Pollensa, 21-23 Edificio Airplus 28042 Madrid Phone: 913 993 674 Fax: 913 291 146 E-mail: airplusops@jet.es Contact: Antonio Mata, presidente de Air Comet PECOM ENERGIA: Sells Venezuelan Gas Field Shares ------------------------------------------------ The Venezuelan subsidiary of PeCom Energia has sold some of its assets in the country, reports local paper El Cronista. Japanese oil company Teikoku Oil bought about 50 percent of its shares in the San Carlos and Tinaco gas fields for US$1 million in cash and US$4 million to start seismic operations in the area. Teikoku will be paying an additional US$3 million through a bond if the blocks prove to be productive. The Venezuelan subsidiary of PeCom generated 13 percent of the VEB$1.656bil turned over by PeCom Energia, and generated 27 percent of the VEB$687mil obtained by the group in cash flow last year. PeCom invested a total US$1.686bil in Venezuela for the past eight years. Previously, Perez Companc signed a definitive stock purchase agreement allowing Brazil's federal energy company Petrobras to acquire a controlling 58.6% stake in the company. CONTACT: PECOM ENERGIA S.A. DE PEREZ COMPANC S.A. Maipo 1 - Piso 22 - C1084ABA Buenos Aires, Argentina Phone: (54-11) 4344-6000 Fax: (54-11) 4344-6315 URL: http://www.pecom.com.ar/ PEREZ COMPANC: Announces JV Agreement With Teikoku Oil ------------------------------------------------------- Perez Companc S.A. (Buenos Aires: PC NYSE: PC), controlling company with a 98.21% stake in Pecom Energ｛ S.A. (Buenos Aires: Peco), announces that it has subscribed an association agreement with Teikoku Oil Co., Ltd, whereby it transferred 50% of its rights and obligations inherent to gas production in San Carlos and Tinaco exploratory areas located in Cojedes, Venezuela. The Transfer of Interest Agreement which is subject to the pertinent authorization by the Venezuelan Ministry of Energy and Mines, provides for an initial cash payment of US$ 1 million and a subsequent disbursement of US$ 2 million for the financing of the exploratory investments program in the Tinaco area in relation with geological studies, 2D seismic and 2D seismic evaluation and interpretation. The companies participating in the joint business agreed to start exploration of 200 Km. of 2D seismic in the Tinaco area by the end of 2002. Furthermore, in the event a joint commercial development in such area is agreed upon, Pecom Energ｛ S.A. will receive a supplementary payment in the amount of US$ 3 million. Pecom Energ｛ S.A., with the remaining 50% interest in such areas, will continue in its role as operator. In connection with such a transaction and taking into account the exploration investments previously made by Pecom Energ｛ S.A., the Company will record a loss of approximately P$38 million. * S&P Rates Argentine BODEN Bonds CC ----------------------------------- Standard & Poor's Ratings Services said Wednesday that it assigned its double-'C' rating to the Republic of Argentina Argentine peso-denominated ArP3.438 billion 2007 BODEN bond due Feb. 3, 2007, the U.S. dollar-denominated US$886 million 2005 BODEN bond due May 3, 2005, and the U.S. dollar-denominated US$11.77 billion 2012 BODEN bond due Aug. 3, 2012. The bonds were issued by Argentina's government to depositors who chose to participate in the "bonds-for-term-deposits swaps" program applied to frozen deposits. They were also issued to banks as compensation for the asymmetric pesification of their assets and liabilities. The new bonds that will be issued to depositors once the second ongoing swap concludes are also likely to be rated double-'C' by Standard & Poor's. Standard & Poor's also assigned its single-'C' rating to the short-term dollar-, peso-, and dollar-linked -peso-denominated notes (LEBACs) issued by the Banco Central de la Republica Argentina. The long-term BODENs and short-term LEBACs are rated the same as other long- and short-term nondefaulted Argentinean obligations. =========== B R A Z I L =========== BRASIL TELECOM: Dollar-Denominated Debt Swells In 3Q02 ------------------------------------------------------- Brasil Telecom, Brazil's third largest fixed line operator in terms of lines in service, saw its dollar-denominated debt climb 2.6 percentage points to 9.2% of total debt at the end of the third quarter of 2002. The Company, says Business News Americas, attributed the increase to the 32.7% depreciation of the real against the dollar during the quarter. At the end of September, Brasil Telecom had BRL409 million (US$107mn) in dollar-denominated debt. The Company had hedged 38.1% of its dollar debt, and 100% of all dollar debt coming due through the end of next year. Excluding inter-company debt with controller Brasil Telecom Participacoes, the Company's debt to equity ratio stood at 34.5% at the end of the quarter. Brasil Telecom also reported a net reduction of 349 employees in 3Q02 compared to the previous quarter, with 5,770 employees at end-September. At the end of the quarter, Brasil Telecom's efficiency ratio stood at 1,599 lines in service/employee, compared to 1,460 lines/employee for 2Q02. Capex was BRL332 million for 3Q02, compared to BRL397 million in the previous quarter. Last week, Fitch placed the local currency rating of Brasil Telecom and Brasil Telecom Participacoes, both rated Local Currency BBB-, on Rating Watch Negative. CONTACT: BRASIL TELECOM PARTICIPACOES Sia Sul, Asp, Lote D, Bloco B 71215-000 Brasilia, D.F., Brazil Phone: +55-61-415-1414 Fax: +55-61-415-1315 http://www.brasiltelecom.net.br Luis O. Carvalho da Motta Veiga, Chairman Paulo Pedrao Rio Branco, CFO/Investor Relations Officer BSE: Fitch Cuts Ratings ----------------------- Fitch Ratings downgraded and placed on Rating Watch Negative the ratings of BSE S.A. The issues affected are: (Downgraded From/To) From To --National Scale BBB-(bra) CC(bra) --Debentures 1st Issuance (National Scale) BBB-(bra) CC(bra) The rating actions consider the continued deterioration in the operating environment in Brazil, a weaker outlook for domestic growth and a contraction in the external credit lines available to Brazilian companies. In addition, the sharp devaluation of the Brazilian real and the hike in already high local interest rates will add to the financial pressures faced by many corporates. Such factors affect the ability of the Company to generate cash flow to meet debt service obligations and to refinance short-term debt. Liquidity for Brazilian corporates remain under pressure as many companies have been shut out from the international markets, for the most part, over the last couple of years. The local banks and domestic capital markets have replaced a portion of the debt previously funded internationally, but prospects for further tightening in the domestic market seem more pronounced, which adds to refinancing risk. Fitch expects local banks' lending capacity will be squeezed by higher reserve requirements, continued government borrowing needs, and by limited access to foreign funding, which further exacerbates refinancing risks for the corporates. The ratings agency is also concerned about trade finance available to exporters. Access to trade finance revolves around the changing sentiment of international banks toward this form of debt. Historically, international banks have supported Brazilian exporters during difficult periods by extending trade finance lines - albeit at high interest rates - to Brazilian banks that would, in turn, lend the funds to the top exporters. Exporters have benefited from this arrangement by receiving relatively inexpensive working capital financing and by having an important source of funding available during the most difficult periods. The Brazilian government benefited, in turn, by having its most important generators of hard currency remain solvent when the country was in the midst of political or economic turbulence. During 2002, the landscape changed with international banks essentially cutting off trade finance to Brazilian exporters for about two weeks during the first weeks of July and offered it only to a very select group of companies at extremely high interest rates according to a survey of companies rated by Fitch. In the beginning of August, anecdotal information from top-tier exporters contacted by Fitch suggested that only 20%-30% of trade lines were being renewed. As a result, corporates that have lower financial flexibility and liquidity relative to their current trade finance lines remain under pressure should investor confidence fail to return to Brazil in the near term. If this situation persist, it is likely that further negative rating action could occur. Fitch will continue to closely monitor the events in Brazil as well as other factors that may affect credit risks. FIAT: May Sell Bank in Brazil to Raise Cash ------------------------------------------- FIAT, the Italian assembler in Brazil may sell its financial arm in the country Banco Fiat. Local paper O Estado de Sao Paulo reports that the move is part of the company's plan to raise assets of US$1.12 billion by the end of this year. The company is facing total debts of US$3.5 billion and is struggling to honor deals with creditors. According to international agencies, the bank is worth some US$97.4 million. The report indicates four banks that would be the most likely candidates for Banco Fiat's portfolio, worth R$3bil: Bradesco, Itau, Unibanco and ABN-Amro Bank. In 2001, the institution posted a profit of R$132mil, 52% of the figure posted by Fiat. Earlier reports held that Fiat is looking for a partner for its Brazilian financing arm. MRS LOGISTICA: Fitch Drops Local Currency To BB- on Weakness ------------------------------------------------------------ Fitch Ratings downgraded the local currency rating of Brazilian railroad concessionaire MRS Logistica to BB- from BB and placed it on Rating Watch Evolving. The rating actions consider the continued deterioration in the operating environment in Brazil, a weaker outlook for domestic growth and a contraction in the external credit lines available to Brazilian companies. In addition, the sharp devaluation of the Brazilian real and the hike in already high local interest rates will add to the financial pressures faced by many corporates. Such factors affect the ability of the Company to generate cash flow to meet debt service obligations and to refinance short-term debt. Liquidity for Brazilian corporates remain under pressure as many companies have been shut out from the international markets, for the most part, over the last couple of years. The local banks and domestic capital markets have replaced a portion of the debt previously funded internationally, but prospects for further tightening in the domestic market seem more pronounced, which adds to refinancing risk. Fitch expects local banks' lending capacity will be squeezed by higher reserve requirements, continued government borrowing needs, and by limited access to foreign funding, which further exacerbates refinancing risks for the corporates. Fitch is also concerned about trade finance available to exporters. Access to trade finance revolves around the changing sentiment of international banks toward this form of debt. Historically, international banks have supported Brazilian exporters during difficult periods by extending trade finance lines - albeit at high interest rates - to Brazilian banks that would, in turn, lend the funds to the top exporters. Exporters have benefited from this arrangement by receiving relatively inexpensive working capital financing and by having an important source of funding available during the most difficult periods. The Brazilian government benefited, in turn, by having its most important generators of hard currency remain solvent when the country was in the midst of political or economic turbulence. During 2002, the landscape changed with international banks essentially cutting off trade finance to Brazilian exporters for about two weeks during the first weeks of July and offered it only to a very select group of companies at extremely high interest rates according to a survey of companies rated by Fitch. In the beginning of August, anecdotal information from top-tier exporters contacted by Fitch suggested that only 20%-30% of trade lines were being renewed. As a result, corporates that have lower financial flexibility and liquidity relative to their current trade finance lines remain under pressure should investor confidence fail to return to Brazil in the near term. If this situation persist, it is likely that further negative rating action could occur. Fitch will continue to closely monitor the events in Brazil as well as other factors that may affect credit risks. CONTACT: MRS LOGISTICA S.A. Praia de Botafogo, 228/1201-E Rio de Janeiro - RJ, 22359-900 Brazil Phone: 55-21-2559-4600 Fax: 55-21-2552-2635 E-mail: daf@mrs.com.br Home Page: http://www.mrs.com.br Contacts: Julio Cesar Pinto, Chief Financial Officer Phone: (21) 2559 4600 (32) 3239 3600 (11) 3648 8401 Fax: (21) 2552 2635 (32) 3239 3609 (11) 3645 2743 E-mail: jfn@mrs.com.br NET SERVICOS: Board Notes Ongoing Debt Renegotiation Decisions -------------------------------------------------------------- Net Servi媤s de Comunica𡩣o S.A. ("the Company"), a publicly held company, with its headquarters located in the City and State of Sao Paulo, at Rua Verbo Divino n� 1,356, 1st floor, Ch cara Santo Ant忛io, enrolled with the CNPJ/MF under n� 00.108.786/0001-65, hereby informs the public of the following relevant notice: The Board of Directors of the Company has held a meeting on this date to deliberate, among other issues, on the process of financial re-equation of the Company and on the creation of a pledge on certain assets to be offered as security by the Company's subsidiaries, as widely disclosed in prior relevant notices. The Board of Directors became aware of several multilateral negotiations involving a large number of parties, which fact has delayed completion of the Company's financial re-equation, thus preventing the issue to be resolved at the General Meeting of Shareholders of October 28, 2002, and also resulting in the cancellation of the debentures holders' general meetings. Considering the material changes in the conditions of the financial and foreign exchange markets, as from the moment that the financial re-equation of the Company's debt was defined, the Board of Directors has recognized the need of the Company to proceed with the negotiations, seeking the proper completion of the process, while keeping the original goals. Finally, the Board of Directors recommended to the Company's shareholders that they await the conclusion of such negotiations before deliberating on the amendments to the 2nd and 3rd issuances of public debentures. The Board of Directors will call in due course the competent shareholders meeting to discuss the matter. Sao Paulo, October 29 th , 2002. Leonardo P. Gomes Pereira Investor Relations and Chief Financial Officer CONTACT: Net Servicos De Comunicacao SA Registered Office Rua Verbo Divino, 1.356 - 1 Andar Santo Amaro 04719-002 Sao Paulo - SP Brazil Tel +55 11 5186-2606 Fax +55 11 5186-2780 Web http://www.globocabo.com.br/ Contacts: Roberto Irineu Marinho, Chairman Jose Roberto Marinho, Member Henri Philipe Reischtul, Member NET SERVICOS: Shareholders Approve Debt Restructuring Plan ---------------------------------------------------------------- In an official company press document, Net Servicos issued the following minutes from its recent Extraordinary Shareholders' Meeting: DATE, TIME AND VENUE: On October 28, 2002, at 10:00 o'clock a.m., at the Company headquarters, located at 1356 Verbo Divino Street, Sao Paulo, SP. ATTENDANCE: Present at the Meeting the shareholders, owners of 75.6% of the voting shares issued by the Company, as evidenced by the signatures in the "Shareholders' Attendance Book". MEETING BOARD: Chairman - Marco Aur�lio dos Anjos Ferreira; Secretary - Arnaldo Cordeiro Pacheco de Medeiros Montenegro. CALL: Summoning notice published on September 27, 28 and October 01, 2002, in the Official Journal of the State of Sao Paulo and in the newspaper "Valor Econ𢘫ico" on September 27, 28 and 30 and new call to meeting published in the Official Journal of the State of Sao Paulo on October 10, 11 and 12 and in the newspaper "Valor Econ𢘫ico" on October 09, 10 and 11, 2002. AGENDA: 1. Approval of changes to the indenture of 3rd public issuing of debentures of the Company, in the scope of the restructuring of debt object of Relevant Notice published on the "Valor Econ𢘫ico" newspaper on July 16, 2002, and of changes to the indenture of 2nd public issuing of debentures of the Company in regards to providing collateral by the Company for the purposes of clause 8.1.11 of the first amendment to said deed of 2nd public issuing. 2. To amend article 5 of the Company's By-laws to reflect the increase in capital stock in the amount of R$ 1,223,411,170.80, changing from R$ 1,525,239,629.31 to R$ 2,748,550,800.11, divided into 828,371,343 common shares and 1,200,484,187 preferred shares, all nominative, book-entry shares, no-par value, in conformance with the approvals of the meetings of the Company's Board of Directors held on 8.9.2002, 8.19.2002 and 9.25.2002, respectively. 3. To amend Article 2 of the Company's By-laws to authorize the Board of Directors to deliberate on the transfer of address of the Company's headquarters. 4. To elect a new official member, as well as his alternate, to the Company's Board of Directors. DECISIONS: By unanimous decision the following was approved: i) To amend article 5 of the Company's By-laws to reflect the increase in capital stock in the amount of R$ 1,223,411,170.80, changing from R$ 1,525,239,629.31 to R$ 2,748,550,800.11, divided into 828,371,343 common shares and 1,200,484,187 preferred shares, all nominative, book-entry shares, no-par value, in conformance with the approvals of the meetings of the Company's Board of Directors held on 8.9.2002, 8.19.2002 and 9.25.2002, respectively. Therefore, article 5 of the Company's By-laws shall now effectively read as follows: "Art. 5�. - The Capital Stock is R$ 2,748,550,800.11 (two billion, seven hundred and forty-eight million, six hundred and fifty thousand, eight hundred Reals and eleven cents of Real), divided into 828,371,343 common shares and 1,200,484,187 preferred shares, all nominative, book-entry shares, no-par value. The Capital Stock may be increased to R$ 5,000,000,000.00 (five billion Reals), regardless of amendment to the statutes, as provided for in article 168 of Law 6,404/76, by deliberation of the Board of Directors, which will determine the conditions for the issuing, in the terms of paragraph one of article 170 of Law 6,404/76." ii) To amend Article 2 of the Company's By-laws, which shall now effectively read as follows: "Art. 2�. - The Company is headquartered and has its venue in the City of Sao Paulo, State of Sao Paulo and may, by deliberation of the Board of Directors, transfer the address of the Company headquarters, open, maintain and close branches, offices, warehouses or representation agencies in any part of the national territory or abroad." iii) To approve the election to occupy the position as member of the Board of Directors of the Company, Mr. Eduardo Bunker Gentil, Brazilian, married, economist, bearer of ID N� 3361829, issued by SSP/SP, enrolled in the Tax Roll (CPF/MF) under N� 001067468-39, with offices at Avenida Repηlica do Chile 100, 19� andar, in the City and State of Rio de Janeiro, and to approve the election to occupy the position as alternate member Mr. Alan Adolfo Fischer, Brazilian, legally separated, engineer, bearer of ID N� 3284209- 8, issued by IFP/RJ, enrolled in the Tax Roll (CPF/MF) under N� 667250037-53, with office at Avenida Repηlica do Chile 100, 9� andar, in the City and State of Rio de Janeiro, according to the nomination from the shareholder BNDES Participa媤es S.A. - BNDESPAR. The directors now elected declare that they are not impeded from exercising commercial activities. iv) To temporarily adjourn this Meeting, which shall be resumed on October 30, 2002, at 3:00 o'clock p.m., at the Company headquarters, at 1,356 Verbo Divino Street, in the City of Sao Paulo, State of Sao Paulo, when the Shareholders shall decide about the issue listed in item 1 of the above described "Agenda". CLOSING: As there were no further issues to be discussed at this time, and as nobody wished to speak, this Meeting was temporarily adjourned, and having these minutes being drawn up, read and verified, it was by all approved. ROMA PARTICIPACOES LTDA., DISTEL HOLDING S.A. and GLOBO COMUNICACOES E PARTICIPACOES S.A. represented by Manuel Martins Teixeira Pinto and BNDES PARTICIPACOES S.A. - BNDESPAR represented by Arnaldo Cordeiro Pacheco de Medeiros Montenegro. Sao Paulo, October 28, 2002 Marco Aur�lio dos Anjos Ferreira Chairman Arnaldo Cordeiro Pacheco de Medeiros Montenegro Secretary * Incoming Government Leadership Mulls State Debt Renegotiation --------------------------------------------------------------- The Brazilian government is willing to renegotiate state debt but only if it gains assurance that there is political support on tax and pension reform, according to Jose Dirceu, head of Brazilian President-elect Luiz Inacio Lula da Silva's party. "We can't start negotiations with states without taking into account the country's (fiscal) situation," Mr. Dirceu, president of the Workers' Party, said. "We have to form a pact with governors to approve the tax and social security reforms." In a Bloomberg report, Mr. Dirceu emphasized that giving states debt relief without reducing the social security deficit and simplifying Brazil's system of 53 taxes would fuel inflation and cut revenue the federal government needs to make payments on its roughly $300 billion debt. Brazil's currency and bonds have fallen by a third in 2002 on concern Mr. Lula may raise deficit spending or take other steps that may prompt South America's biggest economy to default. President Fernando Henrique Cardoso, who steps down Jan. 1, and President-elect Lula have promised to maintain a surplus before interest payments of 3.75% of the country's gross domestic product. The goal is a condition for Brazil to receive US$30 billion in loan package pledged by the International Monetary Fund. The country's 27 states owe the federal government 244.5 billion reais ($58 billion) and states set aside about 13 percent of revenue to pay debt to the federal government, he said. ========= C H I L E ========= TELEFONICA CTC: Losses Continue In 3Q02 After Various Charges ------------------------------------------------------------- Chile's incumbent telco Compania de Telecomunicaciones de Chile, or CTC, posted a US$22.5-million net loss for the third quarter of this year, from a US$20.8-million net profit in the same quarter in 2001. In the first nine months of this year, it registered a net loss of US$20.7 million, up substantially from a net loss of US$12.8 million from January through September of 2001. The loss was principally due to a $20.0 million charge in severance pay it booked in the quarter for the layoff of 900 employees as part of a broad restructuring plan. It also booked a US$1.5-million charge on the sale of 25% of information technology unit Sonda, and a US$3.9-million charge due to the drop in market value of its holdings of Internet company Terra Lycos SA. Consequently, non-operating losses widened to US$59.0 million from US$23.5 million in the quarter, the Company said. In the third quarter, sales dropped 2.4% to US$288.9 million, CTC said, without providing a comparative figure, principally due to falling sales at Sonda and reduced income due to a new deal with Publiguias, which publishes Chilean "yellow-page" business directories. Earnings before interest, taxes, depreciation, and amortization declined 7.1% to US$132.0 million from US$142.1 million, while operating profit fell 18.7% to US$46.2 million from US$56.8 million. CTC had 2.72 million fixed lines in service, and 1.76 million mobile subscribers at the end of September, down 1.1% and up 19% from the same date last year, respectively. CONTACT: TELEFONICA CTC CHILE Avenida Providencia 111, Piso 2 Santiago, Chile Phone: +56-2-691-2020 Fax: +56-2-691-2392 Homepage: http://www.ctc.cl Contacts: Mr. Bruno Philippi, President Mr. Jacinto D苔z, Vice President Gisela Escobar, Head of Investor Relations =========== M E X I C O =========== AHMSA: Disallows Creditors From Attending Upcoming Assembly ----------------------------------------------------------- Mexican steelmaker Altos Hornos de Mexico SA (AHMSA) informed the Mexican Stock Exchange that only registered shareholders will be allowed to attend the Company's upcoming shareholders meeting, relates Dow Jones. Those creditors holding shares pledged as loan guarantees will be barred from the assembly, at the company's headquarters in the northern city of Monclova, the filing said. AHMSA was predicting that creditors might seek the removal of the current management during the assembly. Expectations are that creditors of AHMSA's holding company Grupo Acerero del Norte (GAN) would attempt to exercise voting rights on Ahmsa shares that were pledged as a guarantee for loans to GAN. The current management at AHMSA is the largest steel producer in Mexico with two plants in Monclova, Coahuila state. has come under pressure from creditors for failing to resume payments on US$1.8 billion in debt, despite reaching a restructuring agreement last year. AHMSA is the largest steel producer in Mexico with two plants in Monclova, Coahuila state. But Ahmsa explained that under a 1999 suspension of payments on debt, a court ordered the National Banking and Securities Commission and the Mexican Stock Exchange to freeze the shares, disallowing them to be used for any legal or commercial action. CONTACT: AHMSA Prolongacion B. Juarez s/n, Monclova , Coahuila 25770 Mexico http://www.ahmsa.com Phone: +52 86 33 81 72 Fax: +52 86 33 65 66 Contacts: Alonso Ancira Elizondo, CEO, Vice Chairman, Pres./CEO Jorge Ancira Elizondo, Chief Financial Officer Manuel Ancira Elizondo, Chief Operating Officer GRUPO TMM: Announces Operating Partnership With Hub Group --------------------------------------------------------- Grupo TMM, S.A. (NYSE: TMM) announced Wednesday an operating partnership between its wholly owned subsidiary, TMM Logistics, and Hub Group to create a joint network to manage freight moving between Canada, the United States and Mexico. TMM Logistics will provide all sales support and operational execution within Mexico, offering seamless logistical customized cross-boarder shipping solutions, linking railways, roads, ports and a majority of the main cities and production centers in Mexico. Headquartered in Mexico City, Grupo TMM is Latin America's largest multimodal transportation company. Through its branch offices and network of subsidiary companies, Grupo TMM provides a dynamic combination of ocean and land transportation services. Grupo TMM also has a significant interest in Transportacion Ferroviaria Mexicana (TFM), which operates Mexico's Northeast railway and carries over 40 percent of the country's rail cargo. More information is available at Grupo TMM's web site: www.grupotmm.com.mx and TFM's web site: www.tfm.com.mx. Both sites offer Spanish/English language options. CONTACT: Grupo TMM Jacinto Marina, 011-525-55-629-8790 jacinto.marina@tmm.com.mx Brad Skinner (IR), 011-525-55-629-8725 brad.skinner@tmm.com.mx Luis Calvillo (Media), 011-525-55-629-8758 luis.calvillo@tmm.com.mx Dresner Corporate Services Kristine Walczak, 312/726-3600 kwalczak@dresnerco.com ======= P E R U ======= SIDERPERU: Shrinks Net Loss In 3Q02 Despite Slower Sales -------------------------------------------------------- SiderPeru, Based in Chimbote in western Peru's Ancash department, reduced its net loss in the third quarter of this year, reports Business News Americas. In a filing with Lima's securities regulator, the steelmaker revealed that its net loss for the quarter is now down to PEN1.96 million (US$543,000) compared to a loss of PEN2.79 million in same-quarter 2001. Total sales for the quarter were PEN107 million (US$29.7 million) against PEN113 million in the same year-ago period. For the first nine moths of 2002, SiderPeru posted a loss of PEN3.48 million (US$966,000), significantly better than the loss of PEN17.5 million for the same period a year ago. Siderperu, initiated a form of bankruptcy protection in August to completely refinance its debt, said in May it will invest US$4 million this year, and US$6 million annually over the next 8-10 years, following its restructuring plans. Siderperu predicted sales to the mining and trading sectors for this year will amount to US$33 million, while production will total 27,283 tons, 52-percent of which is attributable to the construction sector. The Company has a liquid steel capacity of 520,000tpy, and makes long and flat products. Among its key clients is Moly-Cop in Peru and Chile that manufacture steel grinding balls for mills. The three companies are managed by GS Industries of South Carolina. CONTACT: SIDERPERU - EMPRESA SIDERURGICA DEL PERU Av. Los Rosales 245, Santa Anita Lima 43, Peru Phone: +51 1 362 0646 Fax: [+51] 1 362 0636 [+51] 1 362 0667 E-mail: postmast@sider.com.pe Home Page: http://www.sider.com.pe/ ================================= T R I N I D A D & T O B A G O ================================= BWIA: Faces Imminent Closure Pending Concession Decision -------------------------------------------------------- BWIA, the Trinidad-based airline is facing closure after 63 years of operation. The company holds its collective breath while awaiting the employees' decision on proposed concessions. The outcome will determine BWIA's operational future. The deadline for the concessions was set for Thursday. Some trade unions have asked for the re-nationalization of the airline, which the government has thus far declined. A report from The Caribbean Investor said the airline sought government help for bail out but was told that the government would await the moves of the shareholders and the employees. The government, owning a 49 percent share in the airline since its privatization, has also refused to increase its equity stake. During BWIA's privatization, the government absorbed the airline's debt worth US$300 million. However, the government of Barbados expressed its willingness to support the ailing airline. Barbados promoted BWIA's Manchester route and waived landing fees. Almost one-third of all of BWIA's traffic goes to Barbados. The government of Grenada said it will buy shares from the airline if the act will help ensure the airline's survival. BWIA executives are confident that an agreement for restructuring will be reached by the current deadline. According to BWIA chairman Lawrence Duprey, the company's half-year results reflected the industry's condition in general. Mr. Duprey said that the current slump in the industry was caused by the September 11 terrorist attack in the US, and that BWIA is not the sole airline to be affected. Since the attacks, the company's operating revenues fell by US$53.96 million. Duprey added that the airline's problems are compounded by the proliferation of foreign charters with predatory pricing, and labor disruption in the peak summer season. BWIA's cost cutting measures include the reduction of its fleet, which results in the displacement of 40 pilots. The Board of Directors and other senior officers were given a pay cut and monthly concession payments will be reduced. The report shows that as of June this year, the airline's consolidated net loss for the year to date stood at US$54.34 million as compared to a net profit of US$6.04 million for the first six months of 2001. Last year when the airline announced a US$17.8 million profit, the Government granted US$63 million to BWIA. CONTACT: British West Indies Airways Phone: + 868 627 2942 E-mail: mailto:mail@bwee.com Home Page: http://www.bwee.com/ Contacts: Conrad Aleong, President and CEO (Trinidad) Beatrix Carrington, VP Marketing and Sales (Barbados) Paul Schutz, CFO (Trinidad) BWIA: Pilot Association Questions Training Activities ----------------------------------------------------- The Airline Pilots Association of Trinidad and Tobago revealed that BWIA has begun training four pilots to operate the Dash-8 aircraft. The move comes in contrast to the company's recent announcement to sell three such planes, along with the intention lay off 40 pilots. BWIA is currently in a cost-reduction program, and the 40 pilots to be fired were given a three-month retrenchment notice. The pilots in the association are seeking an investigation as the airline has already sold one Dash-8 unit. They are also clamoring for an assessment of the company's cost-reduction plan, reports the Trinidad Guardian. According to the report, Clint Williams, corporate communications director for the airline, said he was not sure about the pilots being trained for the Dash-8s and had to look into the matter to find out. Mr. Williams suggested that maybe the pilots had to keep their qualifications with the aircraft updated to retain their licences. Earlier, BWIA had asked its employees' cooperation in cost reduction to help the airline survive the business slump. The deadline for the concession is set for Thursday. TTALPA had expressed their willing to support BWIA's proposed restructuring plans, if they are given full details of the plan. Along with other trade unions, TTALPA is asking that an independent audit on the company's books be conducted. BWIA: Employees Stage Strike ---------------------------- Employees of embattles airline BWIA were set to stage a rally on the day before the set deadline for concessions. The Trinidad Guardian stated that the employees felt they needed to take a stand on the direction of the airline's future. According to the Head of the Aviation Communication and Allied Workers Union, Christopher Abraham, the aim of the meeting at the Centre of Excellence is "to get a final position from the workers." BWIA had asked its employees to agree to concessions, as the company aims to save at least US$1 million dollars every month to keep the airline alive. Earlier reports indicate a number of BWIA employees felt "harrased" by the posted countdown of days until Oct 31, the deadline. Flight attendants may not agree to the proposed reduction of their three-day stop-over in London to 18 hours, a mandatory 14-hour work schedule for intra-Caribbean and North American flights as these can be detrimental to their performance in the air. The attendants say they understand that the airline needs help, but they are asking for reconsideration of the proposed reduction in crew lunches and vacation, saying that there are other avenues where the airline can save money. BWIA chief, Conrad Aleong, said management was willing to take a five per cent cut, he would personally give up seven per cent. However, the proposed salary cuts may be worthless, the flight attendants said, as the reduction in personal tax would enable the executives to retain the amount supposed to given up. ================= V E N E Z U E L A ================= SIDOR: Contemplates Legal Action To End Strike ---------------------------------------------- Talks between striking union members and management representatives of Siderurgica del Orinoco (Sidor) over a dispute about bonus calculations collapsed Wednesday, relates Business News Americas. Unions have been on strike since Monday and, despite ongoing talks at resolving the bonus issue, workers downed tools halting operations at the plant. The current bonus impasse stems from negotiations under an agreement that ended a series of short strikes last month over other demands. Now that talks have collapsed, institutional relations director Gaston Montiel revealed that the Venezuela flat steel maker is mulling the idea of using legal action to put an end to the strike. "The correct legal procedures for a strike were not followed in this case, as no demands were presented officially, and so this unforeseen stoppage is not legal," Montiel told Business News Americas. Montiel said the supposed erroneous calculation of bonuses was a result of working conditions being improved. The need to work free days or excessive overtime has been reduced as part of the company's attempt to "humanize" and make more rational use of the labor force, he said. Sidor was privatized in 1990 when the Amazonia consortium - made up of Mexico's Hylsamex, Argentina's Techint group (including its Mexican unit Tamsa), Venezuela's Sivensa and Brazil's Usiminas - acquired 70% of the company. State heavy industry holding company CVG held on to 30% but its stake is due to rise to 42% under a refinancing package announced in August that involves capitalizing part of Sidor's debt. CONTACT: SIDERURGICA DEL ORINOCO, C.A. (SIDOR) Edificio General, Piso 9 Avda. La Estancia Chuao, Caracas 1060 Venezuela Tel: (582) 902 3800/3917/3955 Fax: (582) 993 2930 Home Page: www.sidor.com.ve/ SURAL: Negotiating Debt With Venalum to Reopen Supply Lines ----------------------------------------------------------- Venezuelan private sector aluminum fabricator Sural is now in talks with Venalum, the aluminum smelting subsidiary of state heavy industries holding company CVG, reports Business News Americas. The talks, according to a Venalum spokesperson, are aimed at helping Sural find a way to deal with the amounts owed to South America's largest aluminum producer. Last month, Venalum halted the supply of primary aluminum to Sural after the debt-ridden company only made part of a US$5.5- million payment. Sural was unable to pay its debt in spite of a recently signed agreement which established new payment conditions and other facilities to help reduce the fabricator's US$52-million in debt. However, Venalum denied it is seeking to close Sural. "It wouldn't benefit Venalum or CVG to force the company's bankruptcy. But you must also understand Venalum's position; we can't continue delivering material if we're not paid for it," said its spokesperson. Founded in 1976, Sural is one of the largest manufacturers of wire, wire rod, and aluminum bars used in mechanical applications and welding, as well as cables and conductors for electricity. It has three plants, in Puerto Ordaz (Venezuela), Taranto (Italy) and Quebec, Canada. *********** S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter Latin American is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ, and Beard Group, Inc., Washington, DC. John D. Resnick, Edem Psamathe P. Alfeche and Ma. Cristina Canson, Editors. Copyright 2002. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is $575 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. 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